BAA confident over UK dominance probe

9 August 2007

British airport operator BAA says it is confident that the ownership of its UK airports is in passengers’ interests despite the UK’s Competition Commission hinting that it may break-up BAA.Ferrovial owned BAA is being investigated by Britain’s Competition Commission (CC) after the Office of Fair Trading (OFT) reported it to the CC after a torrent of criticism from airlines and consumers.

BAA has also faced criticism for long security queues, overcrowding and technical glitches in baggage handling equipment at Heathrow, Europe’s busiest airport.

There has also been speculation that Ferrovial may be forced to sell one or more of its seven airports. BAA owns seven UK airports: Heathrow, Gatwick, Stansted, and Southampton in England; and Edinburgh, Glasgow and Aberdeen in Scotland.

The CC investigation into the group’s activities is ongoing, with a decision expected in Dec 2008.

Full statement

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BAA notes the publication today by the Competition Commission (CC) of an issues statement as part of its market investigation of the company’s supply of airport services in the UK. The publication of an issues statement is a standard part of the CC’s process for conducting investigations, and is intended to inform interested parties and provide an opportunity for further points to be raised. The CC makes clear that it has not yet reached any conclusions on this inquiry.

Chief Executive Stephen Nelson commented:

“Many of the issues identified by the Commission today have complex and deep-seated causes that require careful consideration. We welcome the opportunity to state our case to the Commission, and we remain confident that we will demonstrate that BAA’s ownership of airports in the South East and Scotland is in the interests of passengers.

“BAA accepts that the experience of too many passengers using London airports is unsatisfactory. But the problems of congestion and delay which affect passengers have their roots in lack of terminal and runway capacity, not the ownership structure of BAA.

“What London airports especially need is investment to improve the passenger experience. We have tabled ambitious plans to transform our airports and are willing to spend heavily to deliver these solutions. We are working hard to win permission to build new runway capacity at Stansted and Heathrow. We are also investing significant sums in improving the passenger experience by recruiting additional staff, investing in new equipment and transforming some of our existing terminals.

“What London airports do not need are structural changes that will seriously delay the delivery of the investment that is urgently needed to improve the passenger experience and increase capacity.

“BAA and its owners have the will and the ability to make the investment London airports need. We in turn need continued political support for our growth plans, and a commercial and regulatory framework that offers sensible incentives for investment.”——-